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2023 (3) TMI 550 - AT - Income TaxPenalty u/s 270A - Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Assessee case was selected for scrutiny and assessment order was passed u/s 143(3) of the Act by making disallowance u/s 14A r.w Rule 8D - assessee himself did not make any disallowance u/s 14A towards earning of exempt income which are not includible in the total income of the assessee. During the impugned assessment year, he received exempt income of Rs.1,00,503/- and fresh investments was made during the year of Rs.8,20,300/- and the total investments in mutual fund is Rs.5,63,44,040/- at the year end. AO disallowed 1% of the average investments and accordingly it works out to Rs.5,63,440/- and initiated penalty u/s 270A of the I.T. Act.. The penalty order passed by the AO is on under reported income and whether that under report income is in consequence of any misreporting of income. CIT(A) confirmed the order of the AO during the course of hearing, we notice that the AO imposed penalty for not making suo moto any disallowance us/ 14A r.w Rule 8D. The similar issue has been decided by the Hon’ble Delhi High Court in the case of Prom Brother Infrastructure LLP Vs. 110 National Face Less Assessment Center [2022 (6) TMI 130 - DELHI HIGH COURT] Appeal of the assessee is allowed.
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